Employee Retention Credit changes to consider with stimulus package

by Mike Bosma

Mike Bosma

Mike Bosma

While not getting much press, the COVID-19 Stimulus Package approved by Congress in December has several significant components that many business owners are unaware of.

What follows is a comparison with the federal CARES Act from last spring, and the new $900 billion Stimulus Package from December:

Time Period Credit is Available

  • CARES Act: Qualified wages paid after March 12, 2020, and before January 1, 2021.

  • New Stimulus Package: Qualified wages paid after March 12, 2020, and before July 1, 2021 (now available in the first two quarters of 2021).

Eligibility Requirements

  • CARES Act: Businesses with operations that were either fully or partially suspended by a COVID-19 governmental order and only during the period the order is in force; or gross receipts were less than 50% of gross receipts for the same quarter in 2019 until such quarter as gross receipts are 80% of same quarter in 2019. Businesses that were not in existence in 2019 could use a comparison to 2020 for purposes of the credit.

  • New Stimulus Package: Beginning January 1, 2021, the credit will be available to businesses with operations that are either fully or partially suspended by a COVID-19 governmental order and only during the period the order is in force; or gross receipts are less than 80% of gross receipts for the same quarter in 2019. Businesses that were not in existence in 2019 may use a comparison to 2020 for purposes of the credit.

Read entire article in the NNBW: https://www.nnbw.com/news/covering-your-assets-employee-retention-credit-changes-to-consider-with-stimulus-package-voices/

Chris Ewing